China's Government to Control Pulp, Papermaking Growth

Nov. 5, 2007 - The National Development and Reform Commission of China in a published report (Nov. 2) announced that during the "11th Five-Year Plan" period, the state will appropriately control the construction of paper and paperboard projects, and that by 2010, 26.5 million tons of new capacity will be added to paper and paperboard production, 6.5 million tons will be replaced from the existing "backward" (lacking modern technology standards) production capacity, and the effective production capacity will reach 90 million tons.

As specified in the "Papermaking Industry Development Policy," the government will support the domestic enterprises through mergers, joint, reorganization and expansion to form about 10 advanced pulp and paper enterprises with production capacity of around 1-3 million tons, and develop a number of large pulp and paper enterprise groups with an annual output of more than 3 million tons and with the feature of cross-region, cross-sector, cross-ownership and international competitiveness.

At the same time, the government will accelerate the integration of the existing pulp production enterprises, shut down small scale, technology-backward pulp production enterprises; change the current situation where excessive number of small waste paper pulp enterprises exist, and demand chemical straw pulp production enterprises no longer be built. By 2010, for the top 30 of China’s pulp and paper companies, their paper and paperboard production in the proportion of the total national output will increase from the current 32% to 40%.

The "policy" stated that the development of China's paper industry should go through the adjustments "from north to south" to form a reasonable new industrial layout. Of these, south of the Yangtze River will be the main areas for paper industry development, to focus on the forestry-paper integration project construction and accelerate the development of pulp and paper industry. Paper industry in the North of the Yangtze River will be optimized with key raw materials structure adjusted to reduce the number of enterprises and enhance production concentration.

In the field of resource-saving and environmental protection, it is highly important to effectively reduce water consumption which is the focus of resource conservation in paper industry, and the pollution control of straw pulp enterprises is the key to controlling environmental pollution. Efforts will be made to comprehensively construct wastewater discharge remote on-line monitoring system, regularly publish enterprises wastewater emissions, and in accordance with the law, order deadline or shutdown to enterprise that do not meet standards or indicators for environmental protection.

SOURCE: China Securities News

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